Chinese drop airport bombshell
A Chinese engineering company claims in court papers that the former board chairman of the Namibia Airports Company wanted to award a disputed airport contract to his own company.
A Chinese company has alleged in its High Court papers that the Namibia Airports Company (NAC) cancelled the awarding of a N$211 million tender to it because the parastatal's former board chairperson wanted to award the contract to his own company.
China State Construction Engineering Corporation further claims that it provided a performance guarantee of more than N$20 million to the NAC on 25 August 2016 and has not been able to access it to date.
This is while it continues to suffer financial prejudices in respect of monthly running costs estimated at more than N$4.4 million a month.
The Chinese company claims that from August 2016 until 7 December last year it had incurred a total running cost of N$66 million.
The legal battle over the contract for the second phase of the Ondangwa Airport runway rehabilitation project continued yesterday, when heads of argument were submitted.
China State Construction Engineering Corporation is opposing an application by the NAC to reverse the awarding of the contract by the previous NAC board of directors in June 2016.
China State says it filed a copy of an agreement entered into between Rodgers Kauta's private company - Econo Investments - and Tasyapi Group, a Turkish construction company.
China State claims that Kauta's company was offered a N$6 million commission to get the more than N$200 million Ondangwa airport tender. Kauta has denied this.
While China State claims that the Tasyapi Group is represented by a certain Jerfi Soyihan, Namibian Sun could find no information of such a person linked to the Turkish company.
However, China State submits in its court papers that the agreement shows that the NAC, or at least Katau, was not bona fide when it instituted this review application.
“The object of the applicant was to have the tender set aside with the prospect that it subsequently be awarded to Tasyapi. It is submitted that the application stands to be dismissed with punitive costs on this ground alone.”
China State further says that Katau did not disclose to the board the prospects of a substantial financial gain to him, should the tender be set aside.
The NAC argues that the decision of the former board to award the tender to China State was tainted by irregularities.
The board approved the reappointment of China State for phase two of the project on 23 June 2016.
According to the NAC, the mandatory procurement processes required by the company were entirely disregarded, resulting in substantial harm to the “public purse”.
NAC blames this on misrepresentations made by its former acting CEO, Tamer El-Kalawi, and its former head of engineering, information technology and projects, referred to only as Silombela.
The NAC claims that the misrepresentations made by Silombela included telling the board that the price increase was only 1.5% on the initial amount of N$169 million.
“This was a deliberate attempt to downplay the enormous increase in price. The price had in fact increased to N$211 million, which was an increase of 26%,” it claims.
It said the revised pricing by China State was an astronomic N$43 million increase.
Furthermore the revised price included items which were not part of the second phase work programme. For example, the inclusion of fencing at a cost of N$11 million was irregular since that is work to be carried out under phase three.
“Silombela was doing everything he could to sugar-coat the contract and force it through the improper channels,” it submits.
NAC says Silombela also represented to the board on numerous occasions that if China State was reappointed the NAC would save site establishment costs. The final bill of quantities on which the N$211 billion was based included an amount of N$24 million for contractor establishment on site and general obligations. However the earlier bill of quantities stipulated site establishment costs of N$10.3 million.
“What these facts demonstrate is that these misrepresentations were possible because a transparent tender process had not been undertaken in accordance with the procurement policies.”
According to the NAC Silombela had already predetermined that the tender for phase two was not subject to a competitive bid. The representation was made to the previous board that phase two was simply a continuation of phase one and therefore did not require requests for bids and a new tender process.
“This was a staggering representation given the size and magnitude of the project, the urgency regarding the price, the fact that NAC was the custodian of public funds and the fact that NAC was subject to clear procurement policies of which all parties were aware.”
The NAC says the process of awarding contracts to China State was being steamrolled as an urgent issue, while there was no urgency.
According to the NAC its procurement policy was flouted, as the policy makes it clear that all goods and services must be procured by means of a competitive bidding process and this is the responsibility of its Tender and Technical Committee.
No cogent reasons were given motivating exemption under the procurement policy and even then it would not have applied, the NAC argues.
“El-Kalawi and Silombela were determined to steamroll the appointment of China State for phase two, in complete disregard of the procurement prescripts and regardless to the public purse. In achieving this they manipulated the process to ensure the appointment of China State and they caused the board to act in an unlawful and irregular manner,” the company says.
China State admits that Silombela and EI-Kalawi acted improperly and caused the then board to act in an unlawful and irregular manner by not complying with the procurement policy.
“[The] court should not exercise its discretion in favour of the applicant. Instead it should dismiss the self-review application with costs on the ground of unreasonable delay.”
It says even if the court were to find that there were some irregularities or non-compliance with any of the grounds of review alleged by the applicant, that is not enough to justify the reviewing and setting aside of the award.
ELLANIE SMIT
China State Construction Engineering Corporation further claims that it provided a performance guarantee of more than N$20 million to the NAC on 25 August 2016 and has not been able to access it to date.
This is while it continues to suffer financial prejudices in respect of monthly running costs estimated at more than N$4.4 million a month.
The Chinese company claims that from August 2016 until 7 December last year it had incurred a total running cost of N$66 million.
The legal battle over the contract for the second phase of the Ondangwa Airport runway rehabilitation project continued yesterday, when heads of argument were submitted.
China State Construction Engineering Corporation is opposing an application by the NAC to reverse the awarding of the contract by the previous NAC board of directors in June 2016.
China State says it filed a copy of an agreement entered into between Rodgers Kauta's private company - Econo Investments - and Tasyapi Group, a Turkish construction company.
China State claims that Kauta's company was offered a N$6 million commission to get the more than N$200 million Ondangwa airport tender. Kauta has denied this.
While China State claims that the Tasyapi Group is represented by a certain Jerfi Soyihan, Namibian Sun could find no information of such a person linked to the Turkish company.
However, China State submits in its court papers that the agreement shows that the NAC, or at least Katau, was not bona fide when it instituted this review application.
“The object of the applicant was to have the tender set aside with the prospect that it subsequently be awarded to Tasyapi. It is submitted that the application stands to be dismissed with punitive costs on this ground alone.”
China State further says that Katau did not disclose to the board the prospects of a substantial financial gain to him, should the tender be set aside.
The NAC argues that the decision of the former board to award the tender to China State was tainted by irregularities.
The board approved the reappointment of China State for phase two of the project on 23 June 2016.
According to the NAC, the mandatory procurement processes required by the company were entirely disregarded, resulting in substantial harm to the “public purse”.
NAC blames this on misrepresentations made by its former acting CEO, Tamer El-Kalawi, and its former head of engineering, information technology and projects, referred to only as Silombela.
The NAC claims that the misrepresentations made by Silombela included telling the board that the price increase was only 1.5% on the initial amount of N$169 million.
“This was a deliberate attempt to downplay the enormous increase in price. The price had in fact increased to N$211 million, which was an increase of 26%,” it claims.
It said the revised pricing by China State was an astronomic N$43 million increase.
Furthermore the revised price included items which were not part of the second phase work programme. For example, the inclusion of fencing at a cost of N$11 million was irregular since that is work to be carried out under phase three.
“Silombela was doing everything he could to sugar-coat the contract and force it through the improper channels,” it submits.
NAC says Silombela also represented to the board on numerous occasions that if China State was reappointed the NAC would save site establishment costs. The final bill of quantities on which the N$211 billion was based included an amount of N$24 million for contractor establishment on site and general obligations. However the earlier bill of quantities stipulated site establishment costs of N$10.3 million.
“What these facts demonstrate is that these misrepresentations were possible because a transparent tender process had not been undertaken in accordance with the procurement policies.”
According to the NAC Silombela had already predetermined that the tender for phase two was not subject to a competitive bid. The representation was made to the previous board that phase two was simply a continuation of phase one and therefore did not require requests for bids and a new tender process.
“This was a staggering representation given the size and magnitude of the project, the urgency regarding the price, the fact that NAC was the custodian of public funds and the fact that NAC was subject to clear procurement policies of which all parties were aware.”
The NAC says the process of awarding contracts to China State was being steamrolled as an urgent issue, while there was no urgency.
According to the NAC its procurement policy was flouted, as the policy makes it clear that all goods and services must be procured by means of a competitive bidding process and this is the responsibility of its Tender and Technical Committee.
No cogent reasons were given motivating exemption under the procurement policy and even then it would not have applied, the NAC argues.
“El-Kalawi and Silombela were determined to steamroll the appointment of China State for phase two, in complete disregard of the procurement prescripts and regardless to the public purse. In achieving this they manipulated the process to ensure the appointment of China State and they caused the board to act in an unlawful and irregular manner,” the company says.
China State admits that Silombela and EI-Kalawi acted improperly and caused the then board to act in an unlawful and irregular manner by not complying with the procurement policy.
“[The] court should not exercise its discretion in favour of the applicant. Instead it should dismiss the self-review application with costs on the ground of unreasonable delay.”
It says even if the court were to find that there were some irregularities or non-compliance with any of the grounds of review alleged by the applicant, that is not enough to justify the reviewing and setting aside of the award.
ELLANIE SMIT
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